RBI releases Report of Umesh Bellur headed GIRO Advisory Group

The Reserve Bank of India (RBI) released, on its website for public comments, the Report of the GIRO (Government Internal Revenue Order) Advisory Group. GIRO Advisory Group (GAG) was constituted by the RBI in October 2013, under the chairmanship of Prof. Umesh Bellur, Indian Institute of Technology, Bombay to implement a national GIRO-based Indian Bill Payment System.

The panel has recommended a mechanism for centralised bills payment system in India, mainly by laying out 2 organisations:

What are the shortcomings observed in the present scenario of bill collection/ payment process in India?

Absence of Interoperability- Limited or no interoperability, thus each biller needs to establish and supervise its own collection points (BOCPs.

Consumer preference for BOCP- A consumer prefers that BOCP where (s)he feels comfortable by a direct payment and an instant printed receipt received for the payment. Due to lack of visibility consumer usually do not trust agents’ networks.

Poor Accessibility-BOCPs are generally concentrated in urban centers and are not easily accessible to people in rural/remote areas.

Lack of coordinated initiative-No industry-driven initiative as of yet to develop a common interoperable system, which would bring about comfort of payment to users and cost and functional efficiency to the Billers.

There is no common website from where all bills can be accessed and smoothly paid .

Why there is a need for a national ‘GIRO-based Indian Bill Payment System’?

Those people who have access to internet banking facility can pay their bills online, however there are a huge number of consumers who don’t have access to internet banking and thus they cannot pay their bills online. Such consumers have to physically go at different places to pay their different bills. Albeit, the ECS (Electronic Clearing Service) debit volume is growing in India at the rate of 5% per annum and in 2012-13 it was Rs 176.50 Million, but, still this is very small when compared with total billing volume in largely populated country like India. Most of the consumers in India still pay their bills by physically visiting different customer outlets.

Therefore, there is a requirement for an interoperable, integrated bill payment system in India which:-

The model would thus be a 2-tier structure with a single standard setting body (BBPS) with payment and settlement functionalities/responsibilities and multiple operating entities (BBPOUs).

Bharat Bill Payment System (BBPS)

A ‘not-for-profit organization’ registered under the Companies Act 1956, like NPCI (National Payments Corporation of India). It shall have a Steering Group constituting of representatives from the participating BBPOUs and other stake holders.The Roles and Responsibilities of BBPS include:

Setting Business standards and processes the BBPOUs, management of dispute resolution, standards for information exchange.

Marketing and brand positioning of the pan-India Bharat Bill payments system

Accomplishing payment, clearing and settlement of the transactions executed at several BBPOUs

Act as final dispute resolution escalation point

Set up a single website on behalf of the brand for online payment of bills

Bharat Bill Payment Operating Units (BBPOUs)

A for–profit company registered under the Companies Act 1956 and has obtained requisite certification from BBPS for participating in the the centralised bill payments system.

Roles and Responsibilities of BBPOUs:-

Infrastructure development (including APIs as per standards set by BBPS).